True independence of an “independent” director can only be measured by the director’s engagement in the boardroom. Financial independence of the director should demonstrate the freedom and willingness to leave the board if he/she is forced to compromise on the principles of good governance. The regulators be it the Central Bank/SEC/Insurance Board or anyone else should be in a position to see through and avoid related parties being appointed as “Independent Directors”. Of course, the opposing view will be that the regulator should be able to set the right example!


About surenraj

“Views expressed are my own”
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5 Responses to Independence

  1. Farhaz Farouk says:

    This would require a complete change in corporate culture. I realize its easier said than done but perhaps with a few steps at a time we would eventually get there. Thanks.

    • surenraj says:

      It’s also about raising awareness and getting improtant people to talk about the importance of the role of INDEPENDENT DIRECTORS in public and also encourage the financial press to keep writing about the importance of the right culture.

  2. Farhaz Farouk says:

    Adoption and strict implementation of “Corporate Governance Codes” by regulators and statutory authorities, with sound principles relating to independence, would also go a long way.

  3. surenraj says:

    Better regulatory framework Vs more regulations?

    • Farhaz Farouk says:

      More regulations is good provided there is proper implementation and compliance. Otherwise it would be of little use.

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